Troika team back in Cyprus on Jan­uary 27

Financial Mirror (Cyprus) - - FRONT PAGE -

The next mis­sion of in­spec­tors from the Troika of in­ter­na­tional lenders is ex­pected to re­turn on Jan­uary 27 for its sixth re­view of the fi­nan­cial as­sis­tance pro­gramme, hav­ing post­poned its ar­rival when par­lia­ment passed a new bill that would de­lay im­ple­men­ta­tion of the fore­clo­sures bill un­til Jan­uary 30.

Dis­cus­sion in the House of Rep­re­sen­ta­tives on Thurs­day.

The Troika mis­sion will fo­cus on the in­sol­vency frame­work, a “crit­i­cal pri­or­ity” for the pro­gramme at this stage, an IMF source was quoted by the state-run Cyprus News Agency as say­ing.

“A full re­view mis­sion will be­gin once the sus­pen­sion of the fore­clo­sures law is ex­pired. This is the plan at the mo­ment,” the source said.

The House wanted the gov­ern­ment to sub­mit a pack­age of all five bills of an in­sol­vency frame­work, which was sched­uled to be put into force in Jan­uary 1 to set up a safety net to pro­tect vul­ner­a­ble groups from fore­clo­sure of mort­gaged prop­erty.

This bill is con­sid­ered a crit­i­cal pri­or­ity of the pro­gramme given the high level of non per­form­ing loans in the Cyprus bank­ing sys­tem, presently beyond 50% of all loan books held by com­mer­cial banks.

So far, three bills form the pack­age have been be­fore the House, while the fourth is ex­pected ap­proved by the Cab­i­net in its next meet­ing.

The fifth bill of the in­sol­vency pack­age is still in the hands of the Troika for scru­tiny.

The IMF of­fi­cial said that the next tranche of 86 mln euros was halted fol­low­ing par­lia­ment’s decision to sus­pend the fore­clo­sures law and will be dis­bursed when Cyprus ful­fills its obli­ga­tions re­lated to it.

The Troika ini­tially in­formed the Min­istry of Fi­nance that it was sus­pend­ing its forth­com­ing visit to Cyprus, sched­uled for Jan­uary 20.

Pres­i­dent Ni­cos Anas­tasi­ades said last week that he would

is ex­pected tabled to be send back to par­lia­ment (veto) the re­vised bill that was in­tro­duced de­spite warn­ings from the cred­i­tors from the IMF, the ECB and the EU, that such a de­lay could jeop­ar­dise the next tranche of about 430 mln euros, as part of the 10 bln bailout agreed in 2013.

The re­vised bill was drafted by the smaller so­cial­ist EDEK group and sup­ported by all op­po­si­tion par­ties in De­cem­ber in an ef­fort to ap­pease ris­ing con­cerns from home-own­ers that the new pack­age on fore­clo­sures and in­sol­ven­cies favoured banks and that mort­gaged prop­er­ties would be sac­ri­ficed.

Hav­ing al­ready se­cured 350 mln euros from the EU and the ECB, par­lia­ment pro­ceed with the draft changes, after which the IMF said it would not go ahead with the fi­nal pat of 86 mln euros.

The lat­est rift may also force the gov­ern­ment’s hand to ur­gently con­clude the out­stand­ing pieces of leg­is­la­tion that have yet to be tabled in par­lia­ment.

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